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Article

Esfandiar Maasoumi and Tong Xu

The purpose of this paper is to combine multidimensional welfare analysis and entropy metrics to derive not only the best relative weights but also substitution degree…

Abstract

Purpose

The purpose of this paper is to combine multidimensional welfare analysis and entropy metrics to derive not only the best relative weights but also substitution degree among different attributes to construct multidimensional indices of well-being with Chinese Household Income Project Survey 2002 data.

Design/methodology/approach

The authors follow Maasoumi’s two-step measures of multivariate inequality to calculate the inequality for three social groups in China, urban residents, migrants, and rural residents. The two-step approach provides an aggregation formula which is numerically identified in this paper based on a metric entropy distance measure between the distribution of the aggregate well-being functions, on the one hand, and the distribution of the self-reported “happiness” indicator. The authors compare the differences in relative weights and substitution degree for the three groups, and link them to some institutional factors.

Findings

The authors find that incorporating substitution among attributes, and taking into consideration group heterogeneity are very important in multidimensional analysis of well-being.

Originality/value

The two-step approach provides an aggregation formula which is numerically identified in this paper based on a metric entropy distance measure between the distribution of the aggregate well-being functions, on the one hand, and the distribution of the self-reported “happiness” indicator.

Details

Journal of Economic Studies, vol. 42 no. 1
Type: Research Article
ISSN: 0144-3585

Keywords

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Abstract

Details

Journal of Economic Studies, vol. 42 no. 1
Type: Research Article
ISSN: 0144-3585

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Book part

Esfandiar Maasoumi, Melinda Pitts and Ke Wu

We examine the cardinal gap between wage distributions of the incumbents and newly hired workers based on entropic distances which are well-defined welfare theoretic…

Abstract

We examine the cardinal gap between wage distributions of the incumbents and newly hired workers based on entropic distances which are well-defined welfare theoretic measures. Decomposition of several effects is achieved by identifying several counterfactual distributions of different groups. These go beyond the usual Oaxaca–Blinder decompositions at the (linear) conditional means. Much like quantiles, these entropic distances are well-defined inferential objects and functions whose statistical properties have recently been developed. Going beyond these strong rankings and distances, we consider weak uniform ranking of these wage outcomes based on statistical tests for stochastic dominance. The empirical analysis is focused on employees with at least 35 hours of work in the 1996–2012 monthly Current Population Survey (CPS). Among others, we find incumbent workers enjoy a better distribution of wages, but the attribution of the gap to wage inequality and human capital characteristics varies between quantiles. For instance, highly paid new workers are mainly due to human capital components, and in some years, even better wage structure.

Details

Essays in Honor of Peter C. B. Phillips
Type: Book
ISBN: 978-1-78441-183-1

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Book part

Esfandiar Maasoumi and Yifeng Zhu

We examine the potential effect of naturalization on the U.S. immigrants’ earnings. We find the earning gap between naturalized citizens and noncitizens is positive over…

Abstract

We examine the potential effect of naturalization on the U.S. immigrants’ earnings. We find the earning gap between naturalized citizens and noncitizens is positive over many years, with a tent shape across the wage distribution. We focus on a normalized metric entropy measure of the gap between distributions, and compare with conventional measures at the mean, median, and other quantiles. In addition, naturalized citizen earnings (at least) second-order stochastically dominate noncitizen earnings in many of the recent years. We construct two counterfactual distributions to further examine the potential sources of the earning gap, the “wage structure” effect and the “composition” effect. Both of these sources contribute to the gap, but the composition effect, while diminishing somewhat after 2005, accounts for about 3/4 of the gap. The unconditional quantile regression (based on the Recentered Influence Function), and conditional quantile regressions confirm that naturalized citizens have generally higher wages, although the gap varies for different income groups, and has a tent shape in many years.

Details

Essays in Honor of Aman Ullah
Type: Book
ISBN: 978-1-78560-786-8

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Article

Sungwook Cho and Almas Heshmati

The purpose of this paper is to examine the correlation between childhood poverty and its influence on adulthood wage distribution, where childhood poverty refers to the…

Abstract

Purpose

The purpose of this paper is to examine the correlation between childhood poverty and its influence on adulthood wage distribution, where childhood poverty refers to the experience of poverty or poor family background during one’s childhood.

Design/methodology/approach

With data from the Korean Labor and Income Panel Study, a quantile regression technique and a decomposition method are conducted to identify and decompose the wage gap between low (poor) and middle class income groups along the whole current wage distribution, based on a simulated counterfactual distribution.

Findings

The results show that those who had been less fortunate during their childhood were also less likely to have the opportunity to gain labor market favored characteristics, such as a higher level of education, and even earn lower returns to their labor market characteristics in the current labor market. This leads to a discount of about 15 percentage points in the wage, on average, in total for those with underprivileged backgrounds during childhood compared to those with a middle class background. This disadvantage is observed heterogeneously, with a greater effect at the lower quantiles compared to the higher quantiles of the current wage distribution.

Originality/value

This research contributes to the literature by providing a partial understanding of poverty in Korea along with possible causes, including poor family background or childhood poverty, with which the implication of an intergenerational effect is considered.

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Article

Luisa Marti, Rosa Puertas and Consuelo Calafat

The purpose of this paper is to study the efficiency and financial situation of Spanish airlines by conducting a comparative analysis of those operating in hubs and those…

Abstract

Purpose

The purpose of this paper is to study the efficiency and financial situation of Spanish airlines by conducting a comparative analysis of those operating in hubs and those that employ the point-to-point system.

Design/methodology/approach

Data envelopment analysis and accounting rates are implemented to do so.

Findings

The results show that hubs do not result in the companies that use them being efficient. Instead, it is the charter, low-cost and private flight operators that best manage their resources.

Originality/value

The study makes a novel contribution to the literature, as there has been no research on Spanish airlines that compares the two types of operators (hubs and point to point).

Details

Journal of Economic Studies, vol. 42 no. 1
Type: Research Article
ISSN: 0144-3585

Keywords

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Article

Jacques Silber

The purpose of this paper is to aim at taking a closer look at the decline in the inequality of the distribution of four health variables, infant and child mortality…

Abstract

Purpose

The purpose of this paper is to aim at taking a closer look at the decline in the inequality of the distribution of four health variables, infant and child mortality, child stunting and underweight, that took place in various Southeast Asian countries during the past 25 years. More specifically its goal is to check the extent to which this decline in health inequality, as well as the overall reduction in infant and child mortality, in child stunting and underweight, affected the poorest wealth quintile of the population of these countries.

Design/methodology/approach

In the first part of the paper the author presents a systematic comparison of the values taken by various consistent measures of the inequality of health attainments and shortfalls for several countries in Southeast Asia and for four health indicators: infant mortality, child mortality, child stunting and underweight. The second part of the paper uses the concept of Shapley decomposition to determine the respective impacts of the decrease in the average value of these health variables and in the inequality of their distribution on the reduction observed for each of these variables in the lowest wealth quintile.

Findings

During the period examined there was an important decline infant and child mortality as well as in child stunting and underweight in all countries of Southeast Asia for which data were available. As far as the poorest wealth quintile is concerned this decline was mostly the consequence of the overall decline in these health variables rather than to the reduction of the inequality of their distribution.

Research limitations/implications

Data were available for only four health variables and for many countries data were available for only one period.

Practical implications

A decline in health inequality should be considered as an important aspect of poverty reduction.

Social implications

Development should not be limited to its economic components. A broader view of development is indispensable.

Originality/value

This study is probably one of the first ones to provide the reader with data on the reduction in health inequality in Southeast Asia as well as on the impact of this decline on the poorest wealth quintile.

Details

Journal of Economic Studies, vol. 42 no. 1
Type: Research Article
ISSN: 0144-3585

Keywords

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Article

Wisdom Dube and Andrew Phiri

– The purpose of this paper is to examine asymmetric co-integration effects between nutrition and economic growth for annual South African data from the period 1961-2013.

Abstract

Purpose

The purpose of this paper is to examine asymmetric co-integration effects between nutrition and economic growth for annual South African data from the period 1961-2013.

Design/methodology/approach

The authors deviate from the conventional assumption of linear co-integration and pragmatically incorporate asymmetric effects in the framework through a fusion of the momentum threshold autoregressive and threshold error correction (MTAR-TEC) model approaches, which essentially combines the adjustment asymmetry model of Enders and Silkos (2001); with causality analysis as introduced by Granger (1969); all encompassed by/within the threshold autoregressive (TAR) framework, a la Hansen (2000).

Findings

The findings obtained from the study uncover a number of interesting phenomena for the South Africa economy. First, in coherence with previous studies conducted for developing economies, the authors establish a positive relationship between nutrition and economic growth with an estimated income elasticity of nutritional intake of 0.15. Second, the authors find bi-direction causality between nutrition and economic growth with a stronger causal effect running from nutrition to economic growth. Lastly, the authors find that in the face of equilibrium shocks to the variables, policymakers are slow to responding to deviations of the variables from their co-integrated long run steady state equilibrium.

Originality/value

In the study, the authors make a novel contribution to the literature by exploring asymmetric modelling in the correlation between nutrition intake and economic growth for the exclusive case of South Africa.

Details

Journal of Economic Studies, vol. 42 no. 1
Type: Research Article
ISSN: 0144-3585

Keywords

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Article

Michael Enowbi Batuo and Simplice A. Asongu

The purpose of this paper is to investigate the impact of liberalisations policies on income inequality in African countries. Examining whether the liberalisations…

Abstract

Purpose

The purpose of this paper is to investigate the impact of liberalisations policies on income inequality in African countries. Examining whether the liberalisations policies have affected the income distribution of everyone equally or they only assist those who are already relatively well off; leaving the poor behind. The authors also examine how they affect income distribution in the various countries within the continent, and their effect on short and long runs?

Design/methodology/approach

First, The authors used the before and after comparison, to examine the response of the level of income inequality and the volatility of income inequality from the time that financial or trade liberalisations took place in each country. Next, the authors used the panel data techniques model for a sample of 26 African countries spanning the period 1996-2010 to investigate the effect of liberalisation policies on income distribution.

Findings

The authors find that financial liberalisation has a levitated income-redistributive effect with the magnitude of the de jure measure (KAOPEN) higher than that of the de facto measure (FDI); that exports, trade and “freedom to trade” have an equality incidence on income distribution; and that institutional and/or political liberalisation has a negative impact and; economic freedom has a negative income-redistributive effect, possibly because of the weight of its legal component.

Practical implications

In general, this study provides a variegated picture, findings tend to suggest that overall the reforms have increased income inequality in African countries. It would be risky to prescribe a general policy because of the diversity of the country. However, African countries’ better performance can be attributed to a combination of policies. For example avoiding the Marco price mixture of real exchange rate appreciation and high domestic interest rates; having capital controls and prudential financial regulations which would enable them to contain the negative consequence of capital flows; putting a system in place to direct export between African countries and encouraging sub regional integration agreement. The government should put in place countervailing social policies in order to withstand social coherence and smooth the adverse transition of liberalisation policies.

Originality/value

Three main elements of originality clearly standout: first, the estimation approach used in the paper considers both short- and long-run effects of in empirical strategy; second, an exhaustive plethora of liberalisation policies (trade, financial, political and institutional are considered); and third, recent data are used to appraise second generation reforms for more updated policy implications.

Details

Journal of Economic Studies, vol. 42 no. 1
Type: Research Article
ISSN: 0144-3585

Keywords

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Article

Bukhari M. S. Sillah

The purpose of this paper is to investigate the factors of technology diffusion in Saudi Arabia. It is a relevant study for Saudi Arabia, which has embarked on high gears…

Abstract

Purpose

The purpose of this paper is to investigate the factors of technology diffusion in Saudi Arabia. It is a relevant study for Saudi Arabia, which has embarked on high gears of economic modernization that is supposed to be driven by technology and knowledge. Thus, an up-to-date research on the factors of technology diffusion in the country is expected to be of high-valued contribution.

Design/methodology/approach

It employs co-integration method to analyse the long run relations between the technology diffusion and its determinants.

Findings

The study finds that the international trade, particularly the oil sector trade, of the Saudi Arabia appears to play no relevant role in the international technology transfer for Saudi Arabia. The study confirms that technology is an endogenous variable in the presence of human capital; and that the higher levels of educational attainments are found to significantly improve factor productivity. The foreign direct investment (FDI) stock is confirmed to be a consistent and important factor in the process of technology diffusion. The capital goods imports and the domestic R&D expenditure are found to be negatively associated with the technology diffusion.

Research limitations/implications

The machine and transport equipment imports are used by the study as a measure of capital goods imports, and thus a better measure is needed in a further research. Similarly, the limited data on the domestic R&D expenditure has forced the author to rely on estimates and own calculations. Thus, these data limitations could not allow us to have better understanding of the impacts of capital goods imports and domestic R&D on the technology diffusion.

Practical implications

Human capital and FDIs are the key drivers the Saudi authorities should consider for transferring and diffusing technology in the country and expanding non-oil sources of economic growth.

Originality/value

This paper is a first of its kind for the case of Saudi Arabia to analyze the determinants of technology diffusion and investigate the role of the its oil sector trade in the technology diffusion. The oil sector trade is found insignificant in the international technology diffusion process; thus the authorities should refocus the oil sector trade towards technology localization and adoption to increase integrative by-product industries in the country.

Details

Journal of Economic Studies, vol. 42 no. 1
Type: Research Article
ISSN: 0144-3585

Keywords

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